Which of the Following Statements Is FALSE

question 13

Multiple Choice

Which of the following statements is FALSE?

• A)The relative proportions of debt,equity,and other securities that a firm has outstanding constitute its capital structure.
• B)The most common choices are financing through equity alone and financing through a combination of debt and equity.
• C)The project's NPV represents the value to the new investors of the firm created by the project.
• D)When corporations raise funds from outside investors,they must choose which type of security to issue.

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Definitions:

Mutually Exclusive

Scenarios or occurrences that are incapable of happening simultaneously.

Average Accounting Return

A financial ratio indicating the average net income an asset is expected to generate compared to its average capital cost.

Redeeming Feature

A characteristic or option in a financial product that offers the possibility of benefitting the holder, such as the ability to convert bonds into stock.

Required Return

The minimum expected yield by investors for investing in a particular asset, considering its risk.